May
2nd
Sun
2nd
Some Optimism On Italy’s Debt
After reading Citigroup Global Market Report “Sovereign Debt Problems in Advanced Industrial countries” and the BIS working paper “The future of public debt: prospects and implications (pdf)”, I feel a little better about Italy, mostly because we have a primary (i.e. before interests) budget surplus, we didn’t overspend in stimulus programs and age-related government spending has been in part already reformed (see image below).
Finally, if worse comes to worse, a primary budget surplus also means that Italy does not need to tap capital markets after a unilateral default on the debt mountain.
